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TMI Blog2018 (1) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... pter 54 & 55 is not required to pay Excise duty in terms of Rule 12B - demand set aside - appeal allowed. - Appeal No. E/89/08 - A/85012/18 - Dated:- 11-1-2018 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri Prasad Paranjape, Advocate for Appellant Shri S.V. Nair, Assistant Commissioner (A.R.) for Respondent ORDER Per : Ramesh Nair Fact of the case is that whether central excise duty can be recovered from the appellant where admittedly the appellant acted as a job worker who carried out processing activity on behalf of other persons. Under Notification no. 24/2003-C.E.(N.T.) dated 25.03.2003 the liability to pay central excise duty was on the person on whose account the job work activity was carried out. 2. The appellant, Shri Suresh Kumar Agarwal, proprietor of M/s. Saurabh Prints was engaged in printing of man-made fabrics. The appellant used to receive dyed fabrics from the merchant manufacturers and used to carry out printing activity on the dyed fabrics by manually applying on the said fabrics the printing paste which was prepared captively out of the duty paid purchased or prepared dyes by mere mixing or stirring. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Rules, 1994, as introduced vide Notification No.24/2003-C.E. (N.T.) dated 25.03.2003, the liability to pay excise duty was on the person getting the goods covered under Chapter 54 and 55 of First Schedule to the Central Excise Tariff Act, 1985, produced or manufactured on his own account on job work basis. 3.3 Rule 12(1) of the Central Excise Rules, 1994 provides that the principal manufacturer shall obtain registration, maintain account, pay duty leviable and comply with all the relevant provisions of the Rule as if he is the assessee. The first proviso to the said Rule prescribes that the job worker may at his option agree to obtain registration, maintain account, pay the duty etc. Admittedly in the present case the job worker i.e. the Appellant in this case has never exercised such an option. It is not even the case of the Revenue in the show cause notice or finding in the impugned order that the Appellant as job worker has ever exercised such an option. No evidence to this effect has ever been brought on record by the Revenue. 3.4 The Appellant further refers to Rule 12B (6) which stipulates that, notwithstanding anything contained in these Rules, the job worker shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarns or fabrics falling under Chapter 50, 51, 52, 53, 54, 55, 58 or 60, readymade garments falling under Chapter 61 or 62 or made up textile articles falling under Chapter 63 of First Schedule to the Tariff Act produced or manufactured on his account, on job work (hereinafter referred to as the said person ) shall obtain registration, maintain accounts, pay duty leviable on such goods and comply with all the relevant provisions of these rules, as if he is an assessee : Provided that the job worker may, at his option, agree to obtain registration, maintain accounts, pay the duty leviable on such goods, prepare the invoice and comply with the other provisions of these rules. In such a case the provisions of these rules shall not apply to the said person. The job worker, may, at his option, authorize the said person to, on his behalf as his agent, maintain accounts, pay duty, prepare invoice and comply with any of the provisions of these rule except that of rule 9: Provided further that the job worker may make an option to undertake the activities mentioned, in this sub-rule as an agent or person authorized by the said person and in such a case, the said job worker shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er job worker or from a job worker to the said person shall contain, - (i) the name and address of the job worker (the sender). (ii) the description and quantity (in terms of kg./m/Sq. m) of the goods being sent. (iii) the date of dispatch of such goods. (iv) the name and address of the job worker/the said person to whom the goods are being sent (the receiver). (d) The responsibility in respect of accountably of the goods, referred to in sub-rule (3) shall lie on the said person. (5) The job worker, on receipt of the goods mentioned in sub-rule (3) or, as the case may be, from another job worker sent by him in terms of clause (ii) to sub-rule (7), shall duly acknowledge the receipt of the goods on the said document. (6) Notwithstanding any thing contained in these rules, the job worker shall not be required to get himself registered or shall not be required to maintain any record evidencing the processes under taken for the sole purposes of undertaking job work under these rules unless he has exercised his option in terms of the first or the second proviso to sub-rule (1). (7) The job worker, with or without completing the job work, may, - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est with the person who gets yarns, fabrics or readymade garments manufactured or processed on job work. Such person would normally be the owner of the raw material who gets finished products manufactured on payment of job charges. He can take credit of the goods which are used in job work. In such a case, the job worker (such as powerlooms, hand processor and power processors) would be totally free from the duty burden as well as from the procedural requirements. The job worker, however, at his option, can take upon himself to comply with the excise law and pay duty. He can also do so on behalf of the owner of the goods working as his agent. Conversely, such a registered job-worker can authorise a broker/arhatia to pay duty on his behalf. Such persons who manufacture goods or get goods manufactured on job work basis, get registered and pay duty, would be treated at par with actual manufacturer. 7. As per the above clarification the person who gets the goods manufactured on job work basis, take registration and pay the duty, he would be treated at par with actual manufacturer. According to the above clarification the appellant being a job worker, he is not required to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les got manufactured on job-work basis is put on the person who gets goods manufactured on job-work basis. He has to discharge such liability as if he is the manufacturer . This rule does not say anywhere that the person supplying the raw material would be the manufacturer. The rule only says that such person has to discharge the liability and that in the normal course is done by the manufacturer... There is no ruling by the Courts that a Rule cannot be framed to make the supplier of raw material liable to pay duty. This is to say that there is no ruling that a Rules like Rule 7AA and its successor rules are bad in law. That is to say even when the manufacturer of the goods is the job worker, the liability to pay duty can be on another. This position becomes very clear if the definition of assessee and the Rules prescribing who has to pay duty are scrutinized. Rule 7AA was for making a deviation, for textile goods, from the general rule that manufacturer has to pay duty. The position becomes clear when Rule 4 of Central Excise Rule as it existed prior to 25-3-2000 (After 25-3-2003 similar provisions were incorporated as a new rule 12B), is examined. This rule does not state th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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